Washington State Insurance Practice Exam

What are "CGL policies" in the context of insurance?

1. Commercial General Liability policies

2. Comprehensive General Life policies

3. Cost-effective Global Liability policies

4. Combined General Liability policies

The correct answer is: Commercial General Liability policies

CGL policies refer to "Commercial General Liability policies." These are a standard form of insurance coverage that protects businesses from a variety of claims such as bodily injury, property damage, and personal injury that can occur during the course of business operations. They are essential for businesses as they cover legal costs, medical expenses, and damages that may arise from incidents on business premises or as a result of business activities. Commercial General Liability policies are designed to offer broad coverage, which is why they are a foundation for commercial insurance. Businesses of all types typically need this coverage to safeguard against risks that could financially threaten their operations. Understanding CGL policies is crucial for anyone in the insurance industry or for business owners looking to manage their risk exposures effectively. The other choices provided do not accurately reflect the standard terminology used in the insurance industry for this type of coverage and therefore do not capture the essence of what CGL policies are meant to convey.